Leasing the lottery back on the budget table

SPRFINGFIELD -- A budget adviser to Gov. Rod Blagojevich said Wednesday several parties are interested in leasing the Illinois Lottery, and that the deal should bring in at least $10 billion.

Doug Finke

By DOUG FINKE

STATE CAPITOL BUREAU

SPRFINGFIELD -- A budget adviser to Gov. Rod Blagojevich said Wednesday several parties are interested in leasing the Illinois Lottery, and that the deal should bring in at least $10 billion.

“We’ve got a bill drafted, and we want to get it moving in the General Assembly,” said John Filan. “We are confident that we’ll be able to do $10 billion or better. We have several active, interested parties.”

Filan declined to say just how many parties are interested in leasing the lottery.

Blagojevich floated the idea of selling or leasing the lottery nearly a year ago, initially proposing using the money to boost education funding.

However, House Speaker Michael Madigan, D-Chicago, and others balked at the idea because the influx of cash would run out after four years, leaving school districts facing a huge budget hole.

In March, Blagojevich renewed his call to lease the lottery, but this time saying he wanted to use the proceeds to reduce the state’s pension debt. Filan said that is still the administration’s suggestion, but it is up to lawmakers to decide how the money should be spent.

Senate President Emil Jones, D-Chicago, is in favor of leasing the lottery. Madigan remains noncommittal.

Madigan last June submitted a list of questions about such a lease to Blagojevich’s office. Among them was how the administration determined that it could get at least $10 billion. Madigan spokesman Steve Brown said Wednesday those questions have never been answered.

Even if lawmakers go along with leasing the lottery, they will have to find a way to replace the $650 million it now produces annually for education. Blagojevich wanted to use money from his proposed gross-receipts tax to make up the loss.

However, the House voted overwhelmingly against the GRT, and some key Senate Democrats said Wednesday that the idea has little support there, either.

As in the House, though, there is no Senate agreement on what should be done to generate more money. Sen. Donne Trotter, D-Chicago, Jones’ top budget negotiator, said Democrats are eyeing gambling expansion and ending some business tax breaks.

Sen. Debbie Halvorson, D-Crete, a top lieutenant to Jones, said she is looking at a plan that would cut the state sales tax, but then extend the tax to services not now subject to it.

She did not know how much money that would raise or if Blagojevich would even consider it, since he has said he will veto any increase in the sales tax.

“It’s an actual lowering of the rate,” Halvorson argued. “Other than the income or sales tax, what do we have?”

“I haven’t heard that proposal, but I think the governor has been pretty clear on any sales tax increase,” Filan said.

Both Halvorson and Trotter said Blagojevich’s ambitious plan to expand state spending in the fiscal year that begins July 1 will have to be revised.

“Many are conscious that it is a big step to go,” Trotter said. “If that means ratcheting it back down a little bit, I think there’s a mind-set for that to happen.”

Blagojevich, Jones and Madigan have yet meet face-to-face to work out budget details. Blagojevich’s office said the governor wanted a meeting Wednesday, but never got a response from Madigan’s office. Jones’ spokeswoman said Jones and the governor did meet.

Brown said the meeting did not fit into the speaker’s schedule.

Doug Finke can be reached at (217) 788-1527 or doug.finke@sj-r.com.

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